Possibilities for application of SHG-based micro-credit for generating micro and small enterprises in Tibetan refugee settlements
EMORY, US, 25 February 2014
Although overall experiences of Tibetans in exile have been successful and they have been widely lauded as the most successful refugee community in the world, as refugees we face various social, cultural and economic challenges. One of the most pressing challenges with potential long term negative consequences faced by the Central Tibetan Administration (CTA) and Exile Tibetan Community in India is the continued high migration rate of Tibetans from their respective settlements in India to Western Countries, including the United States, Canada and other European countries. This pattern and rate of migration threatens the sustainability of Tibetan refugee settlement in India. The prime purpose of having asked by His Holiness the Dalai Lama for the area specific Tibetan Settlement in late 1959 and early 1960s, was to have an integrated and cohesive Exiled Tibetan community, so that preservation and protection of our unique and compassion-based cultural heritage is ensured. If this migration were to continue at the same rate, this might eventually become biggest impediment in our effort to achieve that goal.
It is a well-known fact that the main motivation behind this rapid and high rate of continued migration of Tibetans refugees from India to western countries is economic benefit. Hence, to tackle this problem, it is important that Central Tibetan Administration (CTA) leadership should make every possible attempt to explore more business opportunities at Tibetan Settlements in India, Nepal, and Bhutan.
The exact number of unemployed youth in the Exile Tibetan diaspora is hard to come by. However, it is clear that the relative unemployment rate of the Exile Tibetan community in India is extremely high. This high rate of unemployment has become a major impediment for creating an economically self-reliant community in Exile. A Demographic Survey conducted by the CTA Planning Commission in 2009 shows that only 39% of the total workforce population (aged 15-64) are main-workers. Economically, the remaining 61% are not only underutilized human capital but add up the opportunity cost on those who are economically productive.
A study on the status of unemployment among Tibetan Youth conducted in Hunsur Tibetan settlement (Rigzin, 2009) shows that many seasonally unemployed youth remain economically unproductive for more than 8-10 months a year. As shown in Figure 1 below, about 50% of respondents do economically productive work for only 3-4 months in a year. From an economic perspective, it is a waste of the most valuable human resources.
The same study (Rigzin, 2009) also shows that 92% of respondents wanted to start their own micro-enterprises. However, 45.6% of respondents said that lack of financial support is the reason behind not being able to do so (Rigzin, 2009). It is clear from the facts and figures that the demand for micro-credit is high among Tibetan diaspora, especially in India, Nepal, and Bhutan.
Although cooperatives (nyam-drel) at many of these settlements are doing their best, the coverage, productivity, and efficiency of these co-operatives are limited. For instance, Bylakuppe Lugsung Samdupling Co-operative Society has just 3,068 shareholders out of 10,921 total population (Home Department, CTA, 2012). This means that the profit from this co-operative is distributed among only 28% of total community members.
While briefly introducing the concept of Self-Help Groups (SHGs), this paper attempts to see the possibilities for adoption of SHG based micro-credit for generating micro and small enterprises in Tibetan refugee settlements in India, Bhutan, and Nepal.
What are Self-Help Groups?
The effectiveness of Self-Help Groups (SHGs) models as grassroots financial intermediaries, and their contribution in poverty reduction and empowerment of rural communities in India, has gained much popularity throughout the world. This concept has now become a new buzzword for developmental expert and practitioners and a major focus of policy makers in many developing and underdeveloped countries around the world.
While the term “self-help group” or SHG can be used to describe a wide range of financial and non-financial associations, in the context of this paper it refers to a form of Accumulating Saving and Credit Association (ASCA) in India which is promoted by government agencies, NGOs, or banks. This association is formed on two basic principles, i.e., “Self help is the best help” and “Unity is strength”. SHGs in India are usually composed of 10 to 20 economically and socially homogeneous affinity groups of the rural poor voluntarily coming forward to save a small amount of money regularly, which is deposited in a common fund until there is enough capital in the group to begin giving collateral free loans to the members. Although it was started as a village-based financial intermediary, SHGs also play an important role in social and education empowerment of rural communities in India.
One fascinating finding during literature review for this paper was that the origin of uniquely Indian microfinance practice through the SHG model has its roots in an initial Tibetan rehabilitation project in then the Mysore State of India. Mysore Resettlement and Development Agency (MYRADA), the NGO that is credited with starting microfinance through SHGs in India, was originally founded in 1968 to assist the Government of India in resettling Tibetan refugees in South India.
The most significant milestone in the historical evolution of SHGs in India was the SHG-Bank Linkage Program, and this programme is acclaimed to be the largest microfinance programme of the world. Because of the outstanding success of this initial SHG-Bank linkage program, the number of SHGs rose from a mere 500 in 1992 to a whopping 7.9 million at the beginning of 2013. Similarly, the total saving corpus has increased from mere few thousands in the early years to 270 billion Indian rupees today, and credit outstanding have increased from few billion rupees to 400 billion Indian rupees during 2012-13.
Feasibility and Adoption of the SHG model in various Tibetan settlements in India
Although the income poverty is negligible among the Tibetan diaspora, the replication and introduction of modified SHG based micro-credit model in various Tibetan Settlements in India is definitely a possibility to explore.
Department of Home, CTA, can start with a pilot project at selected Tibetan settlements in India, to see the feasibility of replication. The possibility for the success of this project is high. As discussed earlier, at present there is no shortage of human capital in these settlements — on the contrary, there are high numbers of underutilized human capital in these settlements.
It is not necessary that these new self-help Groups should only consist of women, as is the case with most of Indian SHGs, it can also have a mixed group. Once a group is formed and have significant collection of funds, they can be linked to various nationalized banks of India, such as State Banks of India, Co-operative bank, SIDBI, etc.
As far as linking of SHGs to micro-credit is concerned, CTA can also play a significant role by providing subsidized loana or micro-credit to groups as it is currently done by Department of Home under the Youth Empowerment Support (YES) project. Once the initial formative stage is over, CTA can guide these groups in starting micro and small enterprises and eventually to larger federations and cooperatives. At this stage there will be a need of separate and more detailed strategic planning. While doing so, it is important to take into consideration of the fact that India is the second largest consumer market in the world, and is projected to be the world’s largest by 2030.
In this light, if CTA is able to act as catalyst of micro, small, and medium enterprises (MSMEs) in Tibetan settlements in India, it will lead to a decrease in this continued high migration rate by creation of more economic and employment opportunities, and eventually lead to an economically self-reliant and prosperous exile Tibetan society. In this way, we will be able to achieve the most important responsibility of our time: to preserve, protect and promote our unique and compassion-based traditional and cultural heritage. So that, when our eventual return to Tibet comes, we shall rise again and rebuild our nation in the most effective and efficient way.
About the author
Tsewang Rigzin is a graduate student studying developmental practice at Emory University. He can be reached at tsewangrigzin59 (at) gmail.com